Duties of Treasurer: Managing Budgets and Predicting Risks
A nonprofit organization (NPO) is often created with a purpose in mind, not profit. This means the organization’s funds are not distributed to its board or employees. However, there are still financial assets that fall into the duties of a nonprofit treasurer. A nonprofit treasurer for a nonprofit organization constantly oversees the state of an organization’s finances while keeping board members informed so they can make educated financial decisions.
Some financial aspects a nonprofit treasurer will review with board members include:
- Organization-wide budgeting statuses;
- Capital budgets;
- Cash flow budgets;
- Opportunity budgets.
When noprofit finances are balanced and adhere to legal and industry standards, this offers better nonprofit project workflow for the board and teammates. Let’s dive into the role of a nonprofit treasurer in more detail.
Duties of a Nonprofit Treasurer
In general, the overall duties of a nonprofit treasurer in a nonprofit organization is to oversee the organization’s budgets, ensure they are in good standing, and inform board members about trends and statuses so they can make informed financial decisions going forward.
A nonprofit treasurer also manages other types of nonprofit budgeting like:
- Banking and bookkeeping;
- Controlled and fixed assets and stocks.
Now, let’s take a deeper look into what a treasurer’s duties will entail for a nonprofit board.
Overall Financial Management
A treasurer’s priority for a nonprofit is managing the board’s current budgets and accounts, as well as financial statements. They then need to communicate all of this information to the nonprofit board. Additionally, a nonprofit treasurer is also required to communicate with nonprofit staff if they are involved in any financial matters or concerns. Aside from working with the nonprofit board, they also need to monitor the function of finance systems, the record-keeping system to ensure the information matches the funder’s conditions, and nonprofit legislative compliance.
Fundraising and Sales
One of the key ways a nonprofit generates funds is through fundraising, which a nonprofit treasurer oversees. Not only do they devise fundraising strategies for a nonprofit board, but they also make sure the nonprofit funds are compliant with funder-set conditions. The fundraising and sales requirements also need to meet legislation, so they ensure the nonprofit systems meet industry standards. Aside from this, a nonprofit treasurer is also in charge of reporting the results of fundraising or sales to the board. From there, they will communicate the results with the nonprofit board, and the results will help them to better their next fundraising strategy.
Budgeting and Planning
Since the board of a nonprofit organization makes the majority of its money through fundraising, they have strict budgets to stick to. The responsibility of ensuring these budgets are being met and not superseded belong to the nonprofit treasurer. They will monitor the nonprofit budgets of current projects, and they will formulate budgets for new projects. From there, they meet with the board and provide financial advice that aligns with their nonprofit operational aspirations. If any changes need to be made, the nonprofit treasurer will make budget adjustments, revising their financial forecast based on the amount already spent on a campaign.
You cannot continue to develop and improve upon strategies without reporting. While they need to provide reports on current and past fundraising efforts, they also present nonprofit teams with regular financial reports for the month or quarter. Additionally, a nonprofit treasurer oversees financial audits with an auditor. The goal of a nonprofit financial audit is to ensure the reported information is true and that there is not anything misleading.
A financial audit includes four phases which a nonprofit treasurer oversees:
- Pre-audit phase. In a document, the auditor and nonprofit treasurer will define the audit’s scope and objectives, as well as the management’s responsibilities.
- Planning phase. All nonprofit financial documents regarding the organization will be reviewed. From there, this information will be taken into account for risk assessment and to create a new audit plan.
- Conducting phase. This is where nonprofit transactions and balances will be tested to make sure they match financial statements.
- Reporting phase. Errors or areas of improvement will be outlined in a document.
After this, a noprofit treasurer will review the organization’s current fund reserve and advise them on the best ways to invest in the future.
Banking and Bookkeeping
One of a treasurer’s responsibilities is to manage all of the nonprofit organization’s bank accounts, as well as oversee nonprofit software and systems for documenting payroll. A nonprofit treasurer needs to ensure that all banking and bookkeeping records remain accurate and match the reporting documents.
Stock and Asset Control
Another one of a treasurer’s responsibilities is stocks. Stocks can be volatile, so it is the treasurer’s job to monitor the status and profit of all nonprofit accounts, as well as create records. A treasurer needs to stay on top of renewing nonprofit insurance policies for stocks, as well as investment policies.
While a treasurer is responsible for implementing all of these facets in an NPO, it is also their duty to ensure they’re being maintained. If something is amiss, such as an inaccurate financial audit, it can affect the organization’s project flow and functionality.
Financial Subgroups in an Nonprofit Organization
The structure and responsibilities can look slightly different for a treasurer in a small nonprofit compared to a treasurer in a large nonprofit.
Treasurer Role in Small Nonprofit Organization
Oftentimes a financial subgroup in a small NPO is more intimate and gives employees who are not financial savvy the opportunity to learn and take on more responsibilities. Usually, a treasurer will work with two other management workers, but a treasurer will lead integral conversations. Not only will they educate the team on financial statuses, but they will also provide them with professional insight so they can develop their own financial skills and experiences.
Treasurer Role in Large Nonprofit Organization
At a larger NPO, a treasurer with work with up to two management workers, as well as Chief Officers and senior employees. Together, they will work together on financial fundraising and strategies, but the treasurer offers their specialized insight and expertise. Oftentimes, the above responsibilities may be divided in a larger organization by level of authority and skillset.
It is the management’s job to answer these integral questions with the nonprofit treasurer:
- What tasks need to get done?
- Who will oversee which tasks?
- How will the tasks be monitored?
Main Types of Budgets a Treasurer Oversees
While a nonprofit treasurer monitors an organization’s overall financial status, they help with specific budgets too, such as:
- Operation budgets for new projects and activities.
- Capital budgets for any construction needs.
- Cash flow budgets, which tracks when profit comes in and out of accounts.
- Opportunity budgets, which helps organizations plan projects ahead of time in case they have extra funds.
Benefits of Having a Board Treasurer
Having a treasurer in an NPO is like having a security blanket — they ensure everything is running efficiently and to legal and industry standards. A treasurer ensures there is enough profit to pay bills and work on next fundraising or project goals, and they also help protect organizations from financial risk. Without a treasurer, an organization is more susceptible to not meeting conditions and legislations, as well as going over budget for projects. On top of this, a team on their own may not be able to predict the risks within a future financial forecast, which can cost an organization a lot of time and effort.
Why Your Nonprofit Organization Needs a Treasurer
An organization’s finances are a serious matter, so an organization’s team needs a treasurer to protect and manage their assets in a healthy way. Once the budget it superseded or profit is lost, it can be a struggle to get it back. Organizations need treasurers because they maintain the financial roof over an organization’s head while preventing leaks and making sure operations can run smoothly.
Need Treasurer Services?
If your organization is in need of the role of a nonprofit treasurer but you do not have the capacity to hire an in-house member to adhere to these duties, then come to Accountor CPA. From bookkeeping to payroll, we can manage your accounting needs so that you can get back to doing what you love, such as strategizing new fundraisers or community outreach. To learn more about our mission and how we can support you, contact us and fill out the form. We will ensure your organization’s finances are being professionally managed and that all duties meet conditions.
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